South African abroad – your inheritance and trust income

Moving abroad presents a wide range of administrative and financial issues. You need to apply for work, sort out that visa, do language and proficiency tests, check out schools, routes to work, public transport, apply for medical cover, life cover, pension, bank accounts and a range of other things.

But there’s one question which will always remain in the back drop – one thing most South Africans don’t consider when moving abroad. What if you’re the beneficiary of a South African trust or inheritance?

What if you’re the beneficiary of a South African estate?

Whether or not you may be the beneficiary of a South African estate is not really something which comes up in general conversation – this holds especially true if you’ve left your family back home to start a new life abroad. It is mostly a topic which is broached in hindsight – something which occurs only once we are faced with the death of a loved one. If you’re planning on emigrating or have emigrated from South Africa, it is something you need to consider as there is moving the proceeds of your South African inheritance or trust fund abroad.

Regulations for trust and inheritance transfers

South African expats who wish to transfer the proceeds of trusts or inheritance offshore can transfer their funds offshore if they fall into these categories:

• South Africans temporarily abroad
  If you are temporarily abroad, you can transfer your funds using your R10 million foreign investment allowance. You will need a tax clearance certificate and green barcoded ID book or smart card. Should you wish to transfer more than this amount, it’s best to apply for financial emigration.

• South Africans who have financially emigrated
  If you’ve emigrated financially, the transfer process is quite simple, and merely requires proof of your emigration status as well as your SARB (Reserve Bank) reference number. Your financial emigration needs to pre-date the testator’s death, however. The funds will then be transferred via your blocked rand account – which can be opened at any major South African bank.

• If you have never been a South African resident
  Funds can be transferred offshore via an authorised dealer once South African authorities have confirmed your non-resident status.

What is financial emigration?

Financial emigration simply changes your financial status as tax resident of South Africa from ‘resident’ to ‘non-resident’.
Financial emigration doesn’t affect your South African citizenship at all – it merely formalises your exit from South Africa for exchange control purposes. If you’ve been living overseas for a while and are looking to receive a South African inheritance, it may be a good idea to consider this step now.

Have a heart-to-heart with your family

Although this may be a sensitive topic, it’s a good idea to discuss a possible inheritance with your loved ones. An open and honest conversation will allow you to choose the route for transferring your money abroad. Or perhaps your family living abroad stands to inherit some money in the event of your death – discuss it with them, even if it’s not something people want to envision. The death of the loved one is not something many of us want to discuss, but it’s crucial to broach this subject before the fact.

Finglobal.com will do the legwork for you

If you’re unsure about your financial status, or need assistance with your inheritance or trust transfers, feel free to leave your details – we’ll call you for a cost- and obligation-free consultation.